Bitcoin is creating a bullish on-chain signal that recently led to a 200% price augment

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According to the latest on-chain observations, realized losses of Bitcoin traders have reached a level that has repeatedly proven critical to the coin’s movement in recent years. The question arises — is Bitcoin’s price bottoming out?

Trader Realized Losses Again Below -12 – What Happened Recently?

In a recent post on Platform X, prominent cryptocurrency analyst Ali Martinez pointed that the number of losses incurred by Bitcoin traders has increased in recent weeks. This on-chain finding is based on the CryptoQuant Profit/Loss Margin metric, which aggregates the profits and losses from all Bitcoin trades.

The profit/loss margin basically assesses the overall profitability of investors in a specific cryptocurrency (in this scenario, Bitcoin). When the value of the metric is positive, it means that more BTC are being sold at a profit. On the other hand, a negative profit/loss margin means that more Bitcoin are being sold at a loss.

According to CryptoQuant data, the profit/loss margin is currently below the -12 level, which means that traders are currently taking more losses than profits in the market. Historically, this level is more significant, considering that the indicator was below the -12 level in previous cycles.

Interestingly, the last few times the P/L Margin has dipped below -12 have been preceded by periods of significant bullish price action. As shown on the chart and highlighted by Martinez, the last two times the indicator has dipped below this level have been marked by price gains of 104% and 193%, respectively.

Source: Ali_charts/X

If this historical pattern is anything to go by, then there is a chance that Bitcoin price could experience significant bullish activity in the near future. Furthermore, seeing significant losses in the market could suggest the bottom of a bear cycle and the beginning of a more positive phase.

Bitcoin Price to Skyrocket? Here Are the Significant Levels to Watch

If the historical pattern pans out and Bitcoin price moves higher, there are a few price zones to watch out for. According to Martinez, the major cryptocurrency has major resistance levels around the $61,340 and $64,620 zones.

This finding is based on the cost base of Bitcoin investors and the distribution of BTC supply across different price ranges. The size of the dots in the chart below reflects the strength of resistance and support and the amount of BTC purchased in each price zone.

At the time of writing, Bitcoin is trading at around $59,467, up 2.7% in the past 24 hours. The flagship cryptocurrency is up 2% in the past week, according to data from CoinGecko.

Bitcoin

The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView

Featured image from Pexels, chart from TradingView

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